Buying builds equity.
Leasing gets a new car every 3 years.
Updated March 2026
Buying usually wins over 5+ years. Leasing wins if you want the newest safety tech and drive under 12,000 miles per year. Enter your numbers to see the real difference.
Your Numbers
Buying
MSRP or negotiated price
Current auto loan APR
48, 60, or 72 months
Leasing
Before tax
24, 36, or 39 months
Typical: 10,000 - 15,000
Monthly loan payment
$601/mo
3-Year Comparison
Total buying cost
$26,641
Down + 3 years of payments
Estimated car value
+$22,759 equity
Net cost: $3,882
Total lease cost
$16,600
All payments + overage + fees
Car equity at end
$0
Net cost: $16,600
5-Year Comparison
Total buying cost
$41,068
Down + 5 years of payments
Estimated car value
+$18,435 equity
Net cost: $22,634
Total lease cost
$27,400
All payments + overage + fees
Car equity at end
$0
Net cost: $27,400
7-Year Comparison
Total buying cost
$41,068
Down + 7 years of payments
Estimated car value
+$14,932 equity
Net cost: $26,136
Total lease cost
$38,600
All payments + overage + fees
Car equity at end
$0
Net cost: $38,600
What this means
- + Buying builds equity - the car is worth money at the end
- + Buying wins clearly at 5+ years if you keep the car
- + Leasing has lower monthly payments and always-new tech
- - Lease mileage overage at $0.15-0.30/mile adds up fast
- - Disposition fee ($300-500) at every lease end
Common Questions
Is it better to buy or lease a car?
Buying is better if you keep cars 5+ years, drive heavily, or want equity. Leasing is better for business write-offs, low mileage drivers, or people who want a new car every 3 years with the latest features. There is no universal answer - it depends on your mileage, how long you keep cars, and whether you can deduct the expense.
What are the hidden costs of leasing a car?
Mileage overage ($0.15-0.30/mile over the annual limit), wear and tear charges at turn-in, a disposition fee of $300-500 when you return the car, potential gap insurance requirement, and early termination penalties that can run into the thousands.
How much do you save buying vs leasing long-term?
Over 7 years, buying typically saves $5,000 to $15,000 because you build equity and avoid repeating fees. At 3 years, the numbers are closer. Use the calculator above with your specific car price and lease terms.
Is leasing a car a waste of money?
Not if you use it as a business deduction, drive under 10,000-12,000 miles per year, or genuinely value having the newest safety tech and full warranty coverage. It is a bad deal if you drive a lot, want to keep the car long-term, or want the option to modify it.